The Quotable Satoshi

Difficulty

Bitcoin: A Peer-to-Peer Electronic Cash System
Date:
To compensate for increasing hardware speed and varying interest in running nodes over time, the proof-of-work difficulty is determined by a moving average targeting an average number of blocks per hour. If they're generated too fast, the difficulty increases.
Cryptography Mailing List
Subject:
Bitcoin P2P e-cash paper
Date:
As computers get faster and the total computing power applied to creating bitcoins increases, the difficulty increases proportionally to keep the total new production constant. Thus, it is known in advance how many new bitcoins will be created every year in the future.
Cryptography Mailing List
Subject:
Bitcoin P2P e-cash paper
Date:
The target time between blocks will probably be 10 minutes. Every block includes its creation time. If the time is off by more than 36 hours, other nodes won't work on it. If the timespan over the last 6*24*30 blocks is less than 15 days, blocks are being generated too fast and the proof-of-work difficulty doubles. Everyone does the same calculation with the same chain data, so they all get the same result at the same link in the chain.
BitcoinTalk
Subject:
Re: Proof-of-work difficulty increasing
Date:
Right, the difficulty adjustment is trying to keep it so the network as a whole generates an average of 6 blocks per hour. The time for your block to mature will always be around 20 hours.
BitcoinTalk
Subject:
Re: The dollar cost of bitmining energy
Date:
Difficulty just increased by 4 times, so now your cost is US$0.02/BTC.